Correlation Between Bank Rakyat and Kalo Gold
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Kalo Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank Rakyat and Kalo Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Kalo Gold Holdings, you can compare the effects of market volatilities on Bank Rakyat and Kalo Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank Rakyat with a short position of Kalo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Kalo Gold.
Diversification Opportunities for Bank Rakyat and Kalo Gold
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Kalo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Kalo Gold Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalo Gold Holdings and Bank Rakyat is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank Rakyat are associated (or correlated) with Kalo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalo Gold Holdings has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Kalo Gold go up and down completely randomly.
Pair Corralation between Bank Rakyat and Kalo Gold
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Kalo Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 5.58 times less risky than Kalo Gold. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Kalo Gold Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.89 in Kalo Gold Holdings on September 4, 2024 and sell it today you would earn a total of 0.85 from holding Kalo Gold Holdings or generate 44.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. Kalo Gold Holdings
Performance |
| Timeline |
| Bank Rakyat |
| Kalo Gold Holdings |
Bank Rakyat and Kalo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Kalo Gold
The main advantage of trading using opposite Bank Rakyat and Kalo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Kalo Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kalo Gold will offset losses from the drop in Kalo Gold's long position.| Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Eurobank Ergasias Services | Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group |
| Kalo Gold vs. Big Ridge Gold | Kalo Gold vs. Radisson Mining Resources | Kalo Gold vs. Roscan Gold Corp | Kalo Gold vs. Independence Gold Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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